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Domestic outsourcing has grown substantially in developed countries over the past two decades. This paper addresses the question of the technological drivers of this phenomenon by studying the impact of the staggered diffusion of broadband internet in France during the 2000s. Our results confirm that broadband technology increases firm productivity and the relative demand for high-skill workers. Further, we show that broadband internet led firms to outsource some non-core occupations to service contractors, both in the low and high-skill segments. In both cases, we find that employment related to these occupations became increasingly concentrated in firms specializing in these activities, and was less likely to be performed in-house within firms specialized in other activities. As a result, after the arrival of broadband internet, establishments become increasingly homogeneous in their occupational composition. Finally, we provide suggestive evidence that high-skill workers experience salary gains from being outsourced, while low-skill workers lose out.

International audience; We estimate the impact of French town hall elections held in mid-March 2020 on the mortality of 163,000 male candidates aged above 60. Their excess mortality during March and April was similar to the general population. We compare candidates in cities with two candidate lists to those in cities with only one list, as elections are more intense in contacts in the former group. We also use a regression discontinuity design and investigate mortality in 2020 depending on how candidates fared in the 2014 election. We cannot detect any causal effect of active participation in the 2020 elections on mortality.

International audience; In this paper, we document the presence of “technology-induced” trade in France between 1997 and 2007 and assess its impact on consumer welfare. We use the staggered roll-out of broadband internet to estimate its causal effect on the importing behavior of affected firms. Using an event-study design, we find that broadband expansion increases firm-level imports by around 25%. The effect on domestic sales is positive but smaller, suggesting that the impact on trade is not limited to a scale effect. We further find that the “sub-extensive” margin (number of products and sourcing countries per firm) is the main channel of adjustment. Finally, we develop a model where firms optimize over their import strategy which yields a sufficient statistics formula for the quantification of the effects of broadband on consumer welfare. Interpreted within this model, our reduced-form estimates imply that broadband internet reduced the consumer price index by 2.22% and that the import-channel, i.e. the enhanced access to foreign goods that is allowed by broadband, accounts for about 33% of that effect.

Using data from a prediction market (crowd-based forecasts), we build a daily measure capturing the risk of Frexit related to the 2017 French presidential elections. We study how unexpected changes in this new measure of political uncertainty in France affect European sovereign spreads vis-a-vis Germany. We show that our uncertainty proxy drives not only the French sovereign spread but also the spreads of those EU countries deemed the most vulnerable to the risk of desegregation of the Euro Zone. These results suggest that specific political uncertainty affects short-term investor’s expectations and may outweigh other economic determinants of sovereign spreads shortly prior to high stake elections

We investigate the impact of wealth taxation on the behavior of entrepreneurs in France. Before 2018, business sales triggered the conversion of tax-exempt business assets into taxable wealth. Using personal tax data, we confirm that retirement of entrepreneurs leads to large annual wealth tax payments. There is no evidence of higher expatriation by entrepreneurs following retirement, but their take-up of tax-favored investments in SMEs increases. The elasticity of such investments to the tax increase is far higher than for charity donations. These investments fall after financial wealth becomes tax-exempt in 2018. This evidence suggests that a wealth tax, combined with tax-favored investment schemes, may have encouraged former entrepreneurs to reinvest their wealth in SMEs.

Suarez Serrato and Zidar (2016) identify state corporate tax incidence in a spatial equilibrium model with imperfectly mobile firms. Their identification argument rests on comparative-statics omitting a channel implied by their model: the link between common determinants of a location’s attractiveness and the average idiosyncratic productivity of firms choosing that location. This compositional margin causes the labor demand elasticity to be independent from the product demand elasticity, impeding the identification of incidence from the four estimated reduced-form effects. Assigning consensual values to the unidentified parameters, we find that the incidence share born by firm-owners is closer to 25% than 40%.

We estimate the tax elasticity of dividends using two recent French re- forms: a hike in the dividend tax rate followed, five years later, by a cut. To follow the cash movements within the balance sheets of households and firms caused by these reforms, we use newly-accessible personal and cor- porate tax registries. Following the tax increase, the elasticity of dividends equals four and there is no shifting towards other personal income cate- gories. We find instead an increase in companies’ spending. After the tax decrease, payouts revert to their initial level, but not enough to offset the amounts received during the high-tax period.

Cet article propose un etat des lieux de la litterature empirique relative a l’evaluation des dispositifs de type zones franches urbaines, aux Etats-Unis et en France, en portant une attention particuliere a leurs effets sur les residents des quartiers cibles. Les conclusions des etudes d’impact divergent quant a la capacite de ces programmes a atteindre leurs objectifs de developpement de l’activite locale et d’amelioration du bien-etre des residents. Aux Etats-Unis, les resultats varient considerablement selon les programmes evalues : l’incapacite des State Enterprise Zones a stimuler l’activite economique locale et l’emploi des residents contraste avec l’efficacite des programmes federaux, qui ont un effet significatif pour les residents de ces zones, en termes d’emplois, de salaire et de qualite de vie. Les conclusions qui concernent le programme francais sont plus homogenes : elles suggerent un impact positif sur l’activite locale en termes de localisation et d’emploi mais qui se fait neanmoins aux depens des zones adjacentes. Par ailleurs, l’effet du programme francais pour les residents des quartiers cibles apparait quant a lui mitige. Mieux comprendre l’influence des specificites des dispositifs, aussi bien en termes de montant financier et de criteres d’eligibilite que de types d’avantages accordes, pourrait etre important pour ameliorer l’efficacite des programmes de zones franches urbaines.

We investigate the role that labor costs hold in exporters’ performance. To do so, we exploit a large-scale French reform that granted most firms a tax credit proportional to the wagebill of their employees paid below a given threshold. This policy effectively translated into a cut in labor cost whose magnitude varies depending on firm-specific wage structures. We use the predicted treatment intensity based on pre-reform composition of the labor force as an instrument for the actual policy-induced firm-level change in labor costs. Although our point estimates are consistent with commonly estimated firm-level trade elasticities combined with reasonable labor shares in total costs, coefficients are found to be very noisy, suggesting lack of robust evidence of a causal effect of the policy. We discuss several potential explanations for our results as well as their implications.

International audience; Using recent data from the French Labor Force Survey, this paper explores how diversity affects individuals’ employment prospects at various geographic levels. Employment correlates positively with local labor market diversity, but negatively with neighborhood diversity. Using several approaches to deal with the endogeneity of local labor market diversity, we do not find any robust evidence of a causal impact of diversity on employment at this rather aggregate level, suggesting that immigrants actually tend to self-select into more economically dynamic areas. However, taking advantage of the very precise localization of the data in order to correct biases related to residential sorting, we confirm a negative effect of neighborhood diversity. We also show that diversity in terms of nationalities matters more than diversity based on parents’ origins, giving insights on the underlying mechanisms.

First published: 05 September 2018 Policy reforms targeting the services sectors are a neglected dimension of the process of structural transformation and economic development. The effects of such reforms on employment across industries as a function of their use of services as intermediate inputs are theoretically ambiguous and remain largely understudied. This paper uses sector-level data for 24 transition economies for the 1990-2012 period to assess the impacts of services policy reforms on downstream manufacturing employment. We find a negative effect of services reforms on manufacturing sector employment. This is mostly associated with the process of transition to a market-based economy. Controlling for transition-specific dynamics, the data suggest a neutral effect of progress towards adopting best practice policies for upstream services on employment in downstream manufacturing. Furthermore, in line with the extant literature, we confirm that services policy reforms enhance productivity of downstream manufacturing industries. Finally, we find that the negative effects on downstream employment are mitigated in countries with better economic governance and human capital.

We study how economic conditions at the time of choosing post-compulsory education affect intergenerational mobility. Exploiting local variation in birthplace unemployment rate at age 16 across 23 cohorts in France, we find that cohorts deciding on post-compulsory education in bad economic times are more educationally intergenerationally mobile – their level of educational attainment is less related to having a white-collar father. These cohorts are also more occupationally intergenerationally mobile; and a large fraction of this effect is explained by business cycle-induced differences in educational attainment. Results are robust to accounting for differential spatial mobility between birth and age 16 by parental occupation. Finally, we provide additional evidence that high local unemployment at age 16 increases the relative school enrollment rate of children of blue collar workers the year after – at age 17.

The rise of radical right parties is a Europe-wide phenomenon. While many studies describe the individual or regional characteristics associated with high propensity to vote for the far-right, we know little about the causal impact of economic shocks on electoral support for the far-right. Over the period 1995-2012, we examine the impact of trade-shocks, measured as exposure to low-wage country import competition, on the local vote share of the National Front, the French main far-right party, during presidential elections. We use small communities (cantons) as units of observations and include province (departement) fixed effects, so that the identifying variation comes from within-province change in imports exposure over time. We find evidence of a small but significantly positive impact of import competition exposure on votes for the far-right: a one standard-deviation increase in imports-per-worker causes the change in the far-right share to increase by 7 percent of a standard deviation. Further results suggest that this effect has been increasing over the time period considered. We conduct a simple sensitivity test supporting the notion that: (i) omitting local share of immigrants is likely to bias our estimate downward, and that (ii) this bias is likely to negligible.

Dans cette Note du CAE, les auteurs s’interessent aux recentes evolutions de l’environnement local des individus et a leurs impacts sur la participation au mouvement des Gilets Jaunes, sur le mal-etre declare et sur la variation du taux d’abstention lors des elections presidentielles. Ils recommandent de redefinir les objectifs des politiques territoriales pour accorder plus de place aux criteres de bien-etre, de privilegier les projets inities localement plutot que des politiques centralisees et de favoriser l’acces aux services, qu’ils soient prives ou publics, afin de preserver le lien social dans les territoires.

The performance of services sectors can have significant impacts on industries that use services as intermediate inputs. In this paper we complement the literature analyzing the productivity effects of services trade policies by investigating the relationship between services policy reforms and employment in manufacturing industries. Using a panel of sector-level data for 24 transition economies for the 1990-2012 period, we find find that moving towards best practice services policies is associated with an economically significant reduction of manufacturing employment. This negative effect is mitigated or disappears for countries with high levels of economic governance and human capital. The decline in manufacturing employment is observed only in the first decade of transition, with the major driver being reforms in the utilities sector. The estimated negative effect of policy reforms is of a contemporaneous nature; it does not persist along the lag structure.